Google’s Lobbyists Say Trump’s China Tariffs Will Hurt Tech Profits  

Eric Schmidt Google (Peter Parks / AFP / Getty)
Peter Parks / AFP / Getty

President Donald Trump told reporters a 25 percent tariffs on Chinese technology goods will help Silicon Valley, but a top industry trade group that represents Google and other companies says Trump’s tariffs will hurt profits.

With the Trump administration slapping a 25 percent tariff on over $50 billion worth of Chinese “industrially significant” technologies, such as robotics and vehicles, beginning next month, President Trump told reporters on Friday at an impromptu White House lawn chat that tariffs are justified to protect America’s “industrially significant” technologies, according to a report by Politico.

President Trump said in a Fox & Friends interview on Friday morning, “You know, we have the great brain power of Silicon Valley, and China and others steal those secrets and we’re going to protect those secrets. Those are crown jewels for this country.”

U.S. trade representatives have long complained about China’s direct theft of intellectual property. The Washington Post reported last week that hackers working for the Chinese government stole a massive 614 gigabytes of data from a U.S. Navy contractor. The hack included top secret details regarding a disruptive offensive capability being developed under the Sea Dragon program, and the plans for a hypersonic anti-ship missile.

But the Trump administration has also focused on what it calls Chinese state-sponsored theft of American intellectual property through mandates that force U.S. firms to make “technology transfers” to Chinese companies to be allowed to sell products in China.

Politico reported that TechNet, the Washington D.C-based Silicon Valley lobbying firm that calls itself the “Voice of the Innovation Economy,” and which includes tech giants like Google and Apple, responded to President Trump’s comments by arguing that his administration’s tariffs will end up “harming the very people he hopes to help, not punishing China.”

TechNet CEO Linda Moore told Politico that the tariffs are a “mistake” and hopes the Trump administration reverses it decision when they realize how much pain the resulting higher prices will inflict on consumers and the U.S. economy. She added: “There is no question pressure on China is needed to address significant concerns about their trade policies and practices, but tariffs are not the way to do it.”

Silicon Valley tech companies are prime beneficiaries of outsourcing manufacturing labor costs to China, where total compensation costs are about one-fifth of the $39.03-per-hour average U.S. cost, according to a February report by the U.S. Congressional Research Service.

Politico observes that although Silicon Valley tech companies want access to sell in China, and that it would be very difficult to find alternative suppliers for many single-sourced Chinese-made components for their products, Silicon Valley CEOs have been reluctant to be seen by the American public as defending China’s trade policies.


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